Match Each Term with Its Definition

question 28

Multiple Choice

Match each term with its definition.
-1000 units

• A)micro-
• B)deci-
• C)kilo-
• D)numerator
• E)denominator
• 12. 1/1,000,000 of a unit
• F)ratio
• G)proportion
• H)means
• I)extremes

Rank products by profitability to optimize the use of constrained resources.

Make informed decisions on further processing of products or selling them as is, based on cost-benefit analysis.

Analyze special orders and their impact on profitability and production capacity.

Understand the make-or-buy decision process and its implications on costs and operations.

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Definitions:

Financial Leverage

The use of borrowed capital or debt to increase the potential return of an investment, amplifying both potential gains and losses.

Operating Leverage

A measure of how sensitive a company’s operating income is to a change in its sales volume, emphasizing the cost structure between fixed and variable costs.

EBIT

A gauge of company profits, Earnings Before Interest and Taxes, leaves out the charges for interest and taxes to show raw earnings.

Sales

The transactions involved in selling goods or services in the normal course of business, generating revenue for the company.